Shell eyes sale of Australia downstream business

Geneva-based Vitol is studying assets including storage terminals, filling stations and an oil refinery in Geelong, south of Melbourne, said the people, asking not to be identified as the details are private. Buyout firm TPG Capital and a group led by Macquarie Group are also weighing bids.

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By ANDY HOFFMAN and BRETT FOLEY

Bloomberg

Vitol Group, the worlds largest independent oil trader,
is considering a bid for some of Royal Dutch Shell's
Australian downstream operations, according to two people
with knowledge of the matter.

Geneva-based Vitol is studying assets including storage
terminals, filling stations and an oil refinery in Geelong, south of
Melbourne, said the people, asking not to be identified as
the details are private. Buyout firm TPG Capital and a group
led by Macquarie Group are also weighing bids for some of the
assets, two people familiar with the situation said.

Shell, Europes biggest oil company,
is stepping up asset sales after spending a record $45
billion on projects and acquisitions last
year. Its earnings from refining and marketing dropped by
almost half to $892 million in the three months to September.

The Hague-based companys Australian unit said in April
it would sell the Geelong refinery to focus on larger
plants, such as the Pulau Bukom refinery in Singapore. The Geelong
facility, which processes about 120,000 bpd of oil, may be
converted to a fuel import terminal if a sale isnt
completed, according to its website.

Shell also has a network of about 900 filling stations in
Australia, two-thirds of which are operated by its retail
partner Coles Group Ltd., owned by Wesfarmers Ltd.

Spokesmen for Shell, Vitol, Macquarie and TPG declined to
comment. Shell plans to sell about A$3 billion ($2.7 billion)
of Australian assets and is talking to parties including TPG
and a group that includes Macquarie, the Australian
Financial Review reported today, citing unidentified
people.

African Purchase

Shell is being advised by Bank of America Corp. on the sale,
the people said.

Vitol agreed in 2011 to buy the bulk of Shells
downstream business in 14 African countries, alongside
Africa-focused private equity firm Helios Investment
Partners, for about $1 billion. The Swiss company owns and
operates refineries in the United Arab Emirates, Switzerland
and the Netherlands with a refining capacity of about 150,000
bpd, according to its website. It also has a storage terminal
venture with facilities in 14 countries.

Australias Macquarie Capital agreed in August to buy
45% of Singapores Helios Terminal Corp. from Oiltanking
for an undisclosed sum, the closely-held German company said
Aug. 12.

Oiltanking bought the terminal on Jurong Island, which
comprises 18 storage tanks, from Chemoil Energy for $285
million a year ago.

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